Top Cybersecurity Best Practices for Financial Services

The financial services industry has always been a high-value target for cybercriminals. Securing these assets is vital, with sensitive client data and financial transactions on the line. 

Protecting client data in banks and financial services companies is crucial for maintaining trust, regulatory compliance, and the integrity of sensitive information. Financial services cybersecurity is a priority for business leaders and management, and they are implementing robust security measures to guard against cyber threats and prevent data breaches. As per the McKinsey 2023 Cybersecurity in Financial Services report, did you know that only 31% of financial organizations feel confident in meeting emerging cybersecurity challenges but still need to prove their security readiness to avoid incidents?

1. Establish Strong Data Access Controls

Why it Matters:

Financial institutions, as well as banks, handle large amounts of data, and sensitive client information can be unnecessarily exposed without proper access controls. Restricting data access based on role, necessity, and seniority is critical to preventing insider threats and limiting damage from external breaches.

Best Practices for Data Access Control:

• Principle of Least Privilege (PoLP): Only grant access to data necessary for an employee’s specific job function, reducing the number of people with access to sensitive information.
  
  
• Role-Based Access Control (RBAC): Assign permissions based on defined roles, making managing access easier and quickly revoking permissions if an employee leaves or changes roles.
  
  
• Continuous Audits of Access Logs: Regularly review access logs to detect unusual or unauthorized access attempts and investigate them promptly.

Results of Strong Access Controls:  

Financial organizations can significantly reduce the risk of accidental and malicious data exposure by implementing strict data access controls, safeguarding client information and reinforcing trust in their security protocols.

2. Conduct Regular Cybersecurity Training and Awareness Programs

Why it Matters:

Human error remains a leading cause of security incidents, often due to phishing or social engineering attacks. Employees need consistent training to recognize and respond to security threats, making cybersecurity awareness a critical component of financial services' defense strategy.

Best Practices for Training and Awareness:

• Frequent Simulations: Conduct phishing and social engineering tests to keep employees vigilant.
  
  
• Customized Training: Tailor training sessions based on roles, as employees in higher-risk departments (IT and finance) may require more in-depth training than others.
  
  
• Encourage a Security-First Culture: Promote a workplace culture where employees feel empowered to report suspicious activities without fear of blame.

Results of Effective Training:  

Through ongoing cybersecurity training, financial institutions create a proactive workforce capable of identifying threats before compromising client data.

Encrypt Data In Transit and At Rest

Why it Matters:

Encryption is essential for protecting data both in storage at rest and during transmission (in transit). Encrypting data ensures that the information remains indecipherable and, therefore, unusable even if intercepted by an unauthorized party. 

Best Practices for Data Encryption:

• Adopt Advanced Encryption Standards (AES): AES-256 is a preferred encryption standard among financial organizations, offering robust protection that is difficult to break.
  
  
• End-to-end encryption for Client Communications: Use end-to-end encryption for communication channels, ensuring client interactions remain confidential.
  
  
• Encrypt Data in Backup Systems: Often overlooked, backup files and archives should also be encrypted to ensure consistent protection across all stored information.

Results of Effective Encryption:  

Robust encryption practices significantly lower the risk of data leakage and unauthorized access, adding a strong security layer that maintains client confidentiality and trust.

4. Regularly Monitor and Patch Systems

Why it Matters:

Unpatched software and outdated systems are significant vulnerabilities in any network. Cybercriminals often exploit known vulnerabilities to infiltrate networks and steal sensitive data. IT leaders in Financial services companies can close these gaps by adopting proactive monitoring and patching practices before exploiting them.

Best Practices for Monitoring and Patching:

• Automate Patch Management: Automated systems can ensure patches are applied as soon as they are released, minimizing the window of opportunity for attackers.
  
  
• Continuous System Monitoring: Use advanced threat detection tools to monitor network traffic for suspicious activities and respond in real-time to emerging threats.
  
  
• Implement a Vulnerability Management Program: Regularly assess the network for vulnerabilities and prioritize patches for high-risk systems that contain or handle sensitive client information.

Results of Effective Monitoring and Patching:  

A well-managed patching strategy and continuous monitoring prevent attackers from exploiting known weaknesses, reducing the likelihood of successful breaches.

5. Implement Multi-Factor Authentication (MFA)

Why it Matters:

Multi-Factor Authentication (MFA) reduces unauthorized access to sensitive information. With just a password, client data is vulnerable to brute-force attacks, phishing schemes, and other infiltration techniques. MFA adds layers, such as a one-time code, biometric authentication, or even security questions, that cybercriminals are unlikely to possess.

Best Practices for MFA:

• Use Layered Authentication: In addition to passwords, employ biometric options, such as fingerprint or facial recognition, and ensure these are used in high-risk scenarios like accessing high-value client accounts.
  
  
• Push Notifications: Send real-time alerts for any login attempt that requires verification. This keeps the client informed and provides an additional check if an unauthorized user tries to gain access.
  
  
• Avoid Overly Complicated Steps: Strike a balance; while security is essential, excessively complex authentication steps can discourage user adoption.

Results of Effective MFA:

Organizations implementing MFA drastically reduce the risk of account takeovers and data breaches, helping protect client data more effectively.

A few more best practices that IT leaders can implement, including -- 

Conduct Regular Security Audits: Routine audits help identify vulnerabilities and compliance gaps, ensuring systems are up-to-date with evolving security standards.

Implement Incident Response Plans: A clear incident response plan minimizes damage and recovery time, allowing for rapid action in case of a breach.

Use Endpoint Detection and Response (EDR): EDR solutions monitor devices for threats in real-time, providing advanced detection capabilities to protect endpoints from cyber threats.

Limit Third-Party Access: Restrict access for third-party vendors to essential systems only, and ensure they meet strict cybersecurity standards to prevent supply chain risks.

Adopt Zero-Trust Architecture: This approach continuously verifies user access to data, reducing the chance of unauthorized access by requiring strict identity verification.

Enable Data Loss Prevention (DLP) Tools: DLP tools monitor and control data movement, preventing unauthorized sharing or exfiltration of sensitive client information.

Have questions?

Need expert assistance on cybersecurity for financial services - or other industries? Please schedule a consultation with our solutions expert and contact us at sales@atlassystems.com